The No. 1 US online casino operator, DraftKings, is buying the No. 1 lottery ticket courier app, Jackpocket. DraftKings made the announcement on Feb. 15, the night before its Q4 2023 earnings call on Feb. 16.
DraftKings (DraftKings 37,50 -0,79%) is spending $750 million on the deal.
The online gambling operator said on Feb. 15:
The Proposed Transaction will enable DraftKings to access and grow into the massive US lottery industry, but more importantly, strengthen its position in Sportsbook and iGaming through higher customer lifetime value — based on demonstrated cross-sell capabilities — and an enhanced customer acquisition engine.
In the same way Boston-headquartered DraftKings is primarily known as a sportsbook even though it offers iGaming, New York-based Jackpocket is first identified as an online lottery ticket courier. However, last month, Jackpocket Casino debuted in New Jersey.
Bonus noticed that, just as Jackpocket leaders told Bonus it would, the online casino app marketed its lottery product to them. However, it was only true in New Jersey.
Meanwhile, Jackpocket’s lottery ticket courier footprint falls across the country. It’s the middleman for lottery ticket purchases in nearly 20 jurisdictions, from Arizona to New York. That footprint includes many states where DraftKings Sportsbook accepts bets.
Plus, online casino gamblers in New Jersey and West Virginia may soon see DraftKings cross-promoting the Jackpocket app. However, that likely won’t happen before lottery ticket buyers try to win the current $457 million Mega Millions jackpot or the $306 million Powerball prize.
Jackpocket’s Business Is Growing
Bonus regularly sought out Jackpocket to discuss the giant lottery jackpots, including those that surpassed $1 billion in prize money.
During each interview, Jackpocket CEO Peter Sullivan reported his lottery ticket courier app accounted for a sizeable portion of ticket purchases.
For instance, on July 28, 2022, Sullivan told Bonus:
During this latest Mega Millions run, which started on April 19, Jackpocket accounted for more than 7% of all Mega Millions tickets sold.
In DraftKings’ announcement on Feb. 15, 2024, Sullivan said:
Together with DraftKings, we will be able to bring tremendous value to our customer base as we advance our mission to create a more convenient, fun, and responsible way to take part in the lottery. DraftKings’ broad footprint and exceptional mobile products present an opportunity to meaningfully expand the digital lottery vertical, and we could not be more excited to come together with DraftKings.
DraftKings Co-Founder and CEO Jason Robins said:
We are very excited to enter the rapidly growing US digital lottery vertical with our acquisition of Jackpocket. This transaction will create significant value for DraftKings not only by giving our customers another differentiated product to enjoy but also by improving our overall marketing efficiency similar to how our daily fantasy sports database created an advantage for DraftKings in OSB and iGaming.
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